American Forfeiture Law: Property Owners Meet The Prosecutor

by Terrance G. Reed

Terrance G. Reed is a partner in the Washington, D.C.,
law firm Asbill, Junkin and Myers. He is also the ABA advisor
to a drafting committee of the National Conference of Commissioners
on Uniform State Laws regarding civil forfeitures.
All opinions expressed herein are solely those of the author.

Executive Summary

Forfeiture laws have become increasingly popular with
state and federal law enforcement officials during the last
10 years. A subject once relegated to obscure passages in
the musty recesses of lawbooks, and rarely invoked in
practice, forfeiture has quickly become the darling of law
enforcement. Since 1985, for example, the total value of
federal asset seizures has increased over 1,500 percent--to
over $2.4 billion,(1) including over $643 million for the
Department of Justice in FY 1991 alone.(2) This bonanza for
law enforcement officials, however, has become a Kafkaesque
nightmare for some property owners, who have found themselves
caught up in a world of bizarre legal doctrine, sometimes
without the assets even to defend themselves.

A New Jersey couple, for example, found their home and
their two cars seized by local police based upon an allegation that they had violated New Jersey law by stealing Express Mail packages containing inexpensive clothing from the
neighbors' property.(3) Similarly, a substantial New Jersey
construction company was seized--lock, stock, and bulldozer--
by state officials based upon a contractual dispute in which
state officials alleged that the company had won, and performed, three municipal construction contracts upon which it
was allegedly ineligible to bid.(4) According to the reasoning
of the New Jersey attorney general's office in that case, if
corporate property is used unlawfully, then all corporate
property is subject to summary seizure by the government and
subsequent forfeiture to the government.(5) In Florida, a
sheriff's department adopted a forfeiture program that authorizes officials who stop and question people on the
streets or highways because they look like suspected drug
couriers to seize as suspected drug money any cash in
amounts over $100 that such people may be carrying, regardless of whether drugs are found.

Nor has the federal government shrunk from engaging in
sweeping forfeiture prosecutions. The most popular rationale--confiscating property that "facilitates" criminal conduct--has been used successfully to seize entire bank accounts based upon the deposit therein of any alleged proceeds of criminal activity. Similarly, federal undercover
agents and informants are schooled in the financial importance of arranging a drug sale on or near valuable real
estate so that the entire tract may be seized under a claim
that the real estate "facilitated" the alleged unlawful
activity. As informants are often rewarded with a percentage of the value of the assets they deliver in this way,
they become very creative and successful in their trade.

Broad forfeiture claims by state and federal officials
might be better justified, and enjoy wider public support,
if their sting were visited only upon the guilty, those who
have intentionally committed crimes. But the oldest and
most frequently used form of forfeiture--civil forfeiture--
is not targeted at criminally culpable property owners.
Instead, as discussed below, civil forfeiture laws apply
indiscriminately to property, regardless of the innocence of
the owner, and render it subject to forfeiture if it is used
unlawfully by anyone. Thus, the family home is fair game
for forfeiture if a son, relative, or friend were to use it
unlawfully--say, by using the telephone to arrange a drug
purchase. Moreover, a growing number of states, such as
Texas, Florida, and New Jersey, apply their forfeiture laws
to any criminal activity, meaning that property owners must
police their property against all such activity, drug-
related or not. With the broadened scope and use of forfeiture laws, property owners are increasingly being deputized
to serve as agents of the state in preventing wide varieties
of criminal conduct. And the price for failure is steep indeed--forfeiture of one's property to the government.

Moreover, by any measure, forfeiture laws provide the
government with unique litigation advantages, benefits not
enjoyed by other litigants in any other area of law. They
generally permit the government to seize property first, for
example, and then place the burden upon the owners to come
forward to prove they are entitled to have their property
returned. This power of immediate possession, usually
through summary government action, provides the government
with tangible bargaining advantages at the outset of any
title dispute between the government and a property owner.
If, as the adage goes, possession is nine-tenths of the law,
the government can secure this advantage before it has any
obligation to prove anything.

Under federal law the government can seize property
based solely upon probable cause to believe that the property was used unlawfully. This probable cause standard for
seizure allows the government to dispossess property owners
based only upon hearsay or innuendo--"evidence" of insufficient reliability to be admissible in a court of law. The
probable cause standard relieves the government of the burden of proving anyone's criminal guilt to obtain a forfeiture judgment over his property.

Perhaps the greatest advantage the forfeiture laws
provide for law enforcement officials lies, paradoxically,
in the fact that their legal justification simply defies
logic. When asked to justify the extraordinary powers
granted to them by such laws, law enforcement officials find
themselves invoking peculiar legal fictions that date back
to feudal times or earlier, wherein inanimate objects are
given life and then forfeited to the government for "their"
criminal misconduct. Forfeiture's justification hinges
entirely upon "old, forgotten, far-off things and battles
long ago."(6) As a result, appeals to reason may be unavailing as quirks of legal history are often successful modernday talismans capable of ending rational debate.

As forfeitures become increasingly popular with law
enforcement officials, efforts have begun to expand government forfeiture powers beyond those justified solely by
reference to historical fictions. In Arizona, for example,
the attorney general's office has unabashedly proclaimed
that the mission of Arizona's forfeiture laws is "'social
engineering' accomplished through government intercession in
commercial activity harmful to the economy as a whole."(7)
When such a broad official charter for forfeiture is combined with the unique litigation advantages that forfeiture
law already offers to law enforcement, a powerful engine of
government power is unleashed.

In this study, I briefly discuss the history of forfeiture and how it has enhanced the power of government over
people and their property in ways that are difficult to
reconcile with long-cherished constitutional rights. Given
the growing use and expansion of forfeiture laws, I argue
that the time is ripe for a reevaluation of those laws to
make them more consistent with both the Bill of Rights and
sound public policy. To that end, I identify some core
principles that should guide forfeiture reform and also
identify specific reforms of existing law and practice that
are consistent with those principles.

A Brief History of Forfeiture

Forfeiture laws were not popular in colonial America,
if only because the British Crown was their primary beneficiary. Indeed, one of the earliest sparks of the colonial
rebellion was kindled by the forfeiture of John Hancock's
schooner Liberty for failure to pay unpopular customs duties
on its cargo of Madeira wine. Boston attorney John Adams
defended Hancock in that case, and his defense was fodder
for the pamphleteers of the American Revolution.(8) Nonetheless, as customs duties were the primary source of government revenue in the early republic,(9) the first session of
Congress enacted forfeiture as a civil sanction for failure
to pay customs duties.(10)

Until 1970, however, all federal forfeitures were civil
forfeitures(11)--that is, they were in rem proceedings,
against the property, premised on the legal fiction that the
forfeited property was guilty of an offense and thereby
became subject to seizure and forfeiture to the government.
The "civil" label attached to such procedures offered several advantages for the government in its prosecution of forfeiture claims, not the least of which was a reduced burden
of proof.(12)

In 1970 Congress enacted the first federal criminal
forfeiture law in the form of the Racketeer Influenced and
Corrupt Organizations (RICO) Act. Unlike civil forfeiture,
criminal forfeiture was justified as a criminal punishment
for the guilty, a punishment imposed through a criminal, in
personam, proceeding directed against an individual for his
alleged criminal act, not against an inanimate object
through legal fiction. The fundamental distinctions between
these two forms of forfeiture, civil and criminal, have both
practical and legal significance for the government's ability to impose forfeiture and for the procedures that are
constitutionally mandated.

Civil Forfeiture

Civil forfeitures have been defended on a variety of
grounds, but the earliest and most pragmatic rationale was
that they were needed "to guard the revenue laws from
abuse,"(13) as most federal revenue during the early days of
the republic were derived from customs duties and tariffs,
which in turn were the first objects of civil forfeiture
legislation.

The most persistent and the core rationale for civil
forfeiture laws, however, rests on a personification theory
under which inanimate objects are imbued with a personality
and are then held accountable for "their" violation of applicable federal laws.(14) As a result of this fiction,
courts have historically disregarded the owner's innocence;
the forfeiture action has been deemed an action against the
res, or thing, not against its owner.(15)

The Taint Doctrine. Historically, civil forfeitures
were explained through a theory of taint--that is, the
forfeited object had become tainted by its unlawful use.(16)
Although it was an unusual legal doctrine, the taint
rationale for civil forfeitures has survived to this day.

The Supreme Court has repeatedly, if begrudgingly,
rejected modern constitutional challenges to civil forfeiture actions. In Goldsmith-Grant v. United States,(17) for
example, the Court confronted a claim by a car dealer that
he should not be required to forfeit his secured interest in
an automobile that was used, after sale, to transport distilled spirits. While sympathetic, the Court was unmoved as
it observed:

If the case were the first of its kind, it and its
apparent paradoxes might compel a lengthy discussion to harmonize the [forfeiture] section [of the
statute] with the accepted tests of human conduct.
Its words, taken literally, forfeit property
though the owner of it did not participate in or
have knowledge of the illicit use. There is
strength, therefore, in the contention that, if
such be the inevitable meaning of the section, it
seems to violate that justice which could be the
foundation of due process of law required by the
Constitution. . . . And it follows, is the contention, that Congress only intended to condemn the
interest the possessor of the property might have
to punish his guilt, and not to forfeit the title
of the owner, who was without guilt.

Regarded in this abstraction the argument is formidable; but there are other and militating considerations.(18)

The Goldsmith-Grant opinion then went on to justify
such an anomalous and counterintuitive result by reference
to the need to protect federal revenue, to common law doctrine from feudal times, and to the Bible. Finally, the
opinion relied on 19th-century precedent, including Justice
Joseph Story's opinion in The Palmyra case,(19) upholding such
forfeitures against innocent owners because "the thing is
primarily considered the offender."(20) It is that personification fiction--the giving of life to inanimate objects--
that is the most constant and persistent legal rationale for
civil forfeitures.

The Personification Fiction. The personification fiction that animates civil forfeiture law has given rise to
truly peculiar vignettes in courtrooms across this country.
Property owners whose assets have been seized by government
officials often try to press their claims for relief through
traditional, well-respected, legal arguments, such as that
they have not been accused of criminal conduct, that they
are presumed by law to be innocent of wrongdoing, or that
the government has taken their property without affording
them any prior notice or hearing.

Unfortunately, those facially formidable legal claims,
claims that normally would find ample support in the Constitution, prove unavailing. Instead, an otherwise rational
judge--one who has earned his status through the exercise of
careful, logical, and sober judgment--informs the property
owner that it is his property, not he, that is being prosecuted by the government; that, in the eyes of the government, his property is a criminal perpetrator and that it is
his property's rights (or lack thereof), not those of its
human owner, that determine the sufficiency of the procedures the government can use to confiscate it.

More than one property owner has been baffled by this
spectacle as he tries to invoke traditional legal arguments
against such government action. Such an imaginative notion
of transferred responsibility for misconduct seems more
natural from a child with his hand in the cookie jar than
from a learned judge. Otherwise rational judges are put in
the awkward position of explaining that, because the forfeiture law views inanimate objects as sentient creatures capable of being bad actors, the constitutional protections
normally afforded the property's owner are not available.
Property owners, faced with such a systemwide suspension of
disbelief, quickly realize that an appeal to reason is
futile.

The power of these historical arguments is formidable,
as the Supreme Court has acknowledged. They have been repeatedly used to cast aside fundamental notions of fairness
that have otherwise guided the development of our system of
justice. The notion, for example, that the innocence of a
property owner is no defense to the forfeiture of his property to the government does violence to widely accepted
common understandings of fair play and due process. As
recently as 1974, however, the Supreme Court reaffirmed the
triumph of forfeiture over protestations of owner innocence
solely by reference to forfeiture's historical lineage.(21)

Why does this legal fiction survive, and even thrive?
The answer is as simple as it is, in a free society, appalling: the personification fiction legally disarms property
owners while significantly enhancing the power of law enforcement to confiscate property--a prescription for effective law enforcement at the expense of due process. Using
this fiction, for example, property owners are deprived of
most of the constitutional protections afforded those actually accused of breaking the law, such as the right to an
indictment, the presumption of innocence, the right to effective assistance of counsel, the right not to be punished
prior to an adjudication of guilt beyond a reasonable doubt,
and the right not to suffer punishment disproportionate to
misconduct. Conversely, the government is relieved of many
of the constitutional and practical requirements that attend
criminal prosecutions, in that it can obtain broad civil
discovery, need not prove anyone's guilt, and can seize
property based upon a finding of only probable cause, leaving property owners with the difficult and expensive burden
of extracting their property from the government's custody.

Thus, owners of property seized by the government
through civil forfeitures are afforded far less legal protection and due process than are criminal or even civil
defendants. Some defend this disparity between the rights
of property owners and those of criminal defendants by noting that criminal defendants often face consequences far
more drastic than property loss, including the stigma of
conviction and incarceration. Yet, if the rights of property owners are guaranteed by the Constitution, as they are,
they cannot simply be ignored for the convenience of the
state, which in effect is what civil forfeiture has
permitted.

The Innocent-Owner Defense. Recognizing these inequities, Congress and a number of state legislatures ameliorated the harshness of traditional civil forfeiture doctrine
during the 1980s by creating forfeiture exemptions for innocent property owners. In so doing, they endorsed a welcome
public policy that the innocent should not suffer property
loss as a result of broad forfeiture statutes. After all,
law enforcement is not advanced by depriving innocent owners
of their property.

Notwithstanding these changes, however, in many jurisdictions, proof of "innocence" has come to mean a great deal
more than mere proof that a property owner is not a criminal. Indeed, the owner must prove instead that he lacked
both knowledge of, and control over the property's unlawful
use. Thus, civil forfeiture not only makes a property owner
his brother's keeper but compels him to prevent the unlawful
use of his property by his brother, or anyone else for that
matter. In many respects, this situation only exacerbates
the disparity in the law's treatment of the criminally accused and the nonaccused property owner. To obtain a criminal forfeiture, the government must prove a defendant's
intentional criminal conduct. To do that, it must prove
both a bad act (actus rea) and a criminal intent (mens rea);
mere knowledge of criminal activity by others is ordinarily
not sufficient to justify conviction, as one must knowingly
participate in a criminal venture to become a criminal. By
contrast, to be exempt from civil seizure and forfeiture, a
property owner must prove a negative: that is, he must
prove he lacked any knowledge (mens rea) of the property's
unlawful use, even though mere knowledge of criminal conduct
is typically insufficient to establish criminal culpability
under criminal law.

This allocation of the burden of proof to property
owners is all the more onerous because many courts equate
actual knowledge, for exemption purposes, with willful
blindness. Thus, to prove an innocent-owner exemption to
forfeiture, a property owner must prove he lacked actual
knowledge of the unlawful use of his property. He also must
prove that he did not know of facts indicating that there
was a high probability that his property was involved in
illegal conduct, and that he did not deliberately avoid
learning the truth of the matter.(22) Thus, to forestall forfeiture through a claim of innocence, a property owner must
prove that he is not criminally culpable and also that he
lacked any knowledge of the alleged criminal conduct. This
is a sort of "super innocence" that even the criminal law
does not require of citizens, as it authorizes civil forfeiture of property for mere knowledge (mens rea), broadly
defined, or inaction (the failure to prevent others from
crime).

The Relation-Back Doctrine. Another significant legal
fiction applicable to forfeitures is known as the relation-back doctrine. Under this doctrine the government's title
to forfeitable property vests at the time the property was
used unlawfully, and the government's title is superior to
that of any subsequent purchaser, transferee, or owner of
the property. Because of the relation-back doctrine, property that is tainted by unlawful acts in, say, 1986 remains
forfeitable today even against someone who purchased it in
1990. In 1814 Justice Story characterized this doctrine as
"monstrous," criticized it as "founded probably on feudal
principles, or the barbaric character of the times," and
predicted "that great embarrassments will arise to the commercial interests of the country; and no man, whatever may
be his caution or diligence, can guard himself from injury
and perhaps ruin."(23) Notwithstanding those warnings by perhaps the most prolific judicial expositor of forfeiture law,
the relation-back doctrine is today firmly rooted in federal
forfeiture statutes.

The impact of the relation-back doctrine is easy to
comprehend. Using it, the government can invalidate numerous asset transfers, however legitimate, by linking the
history of an asset to some unlawful act that occurred while
the asset was in the custody of an earlier owner or user.
In short, the relation-back doctrine affords the government
a type of continuing hidden lien or title claim to property
that is not discernible through normal commercial channels.

As noted above, Congress has enacted selective
innocent-owner defenses to forfeiture to provide owners of
certain types of assets with an exemption.(24) Despite such
clear efforts by Congress,(25) however, the Department of Justice has argued in federal courts that the relation-back
doctrine trumps an innocent-owner defense, contending that
an innocent owner is not entitled to relief from forfeiture
if, under the relation-back doctrine, his property is subject to forfeiture because of an unlawful act by someone
else prior to the present owner's acquisition of the
property.

The Department of Justice feels so strongly about this
issue that it recently sought and obtained a hearing before
the Supreme Court to try to reverse a lower federal court
ruling that would have allowed innocent property owners the
opportunity to exempt their property from forfeiture
notwithstanding the relation-back doctrine. In the solicitor general's brief seeking Supreme Court review, he asserted that:

The title that the United States acquires under
[the relation-back provision] is immediate, unqualified, and irrevocable. [The relation-back
doctrine] leaves no room for the creation, by
means of a later transfer, of an interest in drug
proceeds that is superior to the title conferred
on the government.(26)

As for the harsh effects that such a rule of law creates--
the forced deprivation of property innocently obtained or
owned--the department urged the Supreme Court simply to
trust it to provide forfeiture relief to those it deems
worthy under its unreviewable discretion to remit or mitigate forfeitures.(27) In short, the Department of Justice is
urging the Court to disregard the express statutory rights
of innocent owners and to leave those owners instead to the
mercy of the department.

Unreviewable Petitions For Mercy. Historically, and
until the recent passage of these narrow innocent-owner
defenses, the principal way for aggrieved property owners to
obtain relief from a federal forfeiture has been for them to
apply for remission or mitigation of the forfeiture. Such
pleas are granted, however, only at the unreviewable discretion of the attorney general or seizing agency; property
owners have no legal right to relief as their petitions are
merely pleas for mercy. And they are rarely granted.(28)
More importantly, the Department of Justice, which has issued regulations setting standards for obtaining forfeiture
relief by this administrative process, has set a standard
that is more stringent than is required under most statutory
innocent-owner exemptions. Thus, petitions for remission or
mitigation of forfeiture are justified, under applicable
regulations, only when property owners can satisfy the statutory innocent-owner criteria and also prove that they took
all reasonable steps beforehand to prevent the unlawful use
of their property.

Criminal Forfeiture

Since 1970 Congress has steadily increased the types of
criminal offenses for which criminal forfeiture is a sanction. Unlike civil forfeiture, criminal forfeiture is justified as a criminal punishment; it is imposed in a criminal
in personam proceeding directed against an individual for
his alleged misconduct, not in an in rem proceeding directed
against an inanimate object through legal fiction. Accordingly, a defendant in a criminal forfeiture prosecution is
entitled to all the procedural protections associated with
the criminal process.(29) Moreover, criminal forfeiture law
is not premised on a taint theory but on a punitive theory
whereby forfeiture serves the important penal interests
associated with the criminal process.(30) As the U.S. Court
of Appeals for the Fifth Circuit observed in upholding a
substantial criminal forfeiture, "property forfeited under
RICO need not be 'guilty'."(31) Rather, the scope of criminal
forfeiture is measured by the penal objectives intended by
the legislature. With RICO, for example, courts have readily applied RICO's broad forfeiture language to forfeit legitimately acquired assets to further the purgative goals
that Congress designed for RICO forfeitures--to eliminate
the economic influence of racketeers over legitimate businesses.(32)

Thus, in many respects, criminal forfeiture is broader
in scope than civil forfeiture, as law enforcement can reach
"untainted" assets--that is, assets that were legitimately
acquired or lawfully used. Some courts have entertained
Eighth Amendment challenges--challenges invoking the amendment's protections against excessive fines and disproportionate punishments--to such broad criminal forfeitures.(33)
And some have observed that Eighth Amendment concerns are
most acute when the government seeks to forfeit such untainted assets under a purgative rationale such as that
found in RICO.(34) The unstated premise of such constitutional analysis is that criminal forfeiture has a punitive intent and purpose, one that is subject to the restrictions of
the Eighth Amendment. By contrast, several federal opinions
have concluded that Eighth Amendment proportionality protections simply do not apply to civil forfeitures in that
they are civil, not criminal and theoretically are not punitive.(35)

Expanding the Reach of Forfeiture Laws

During the last two decades, both federal and state
forfeiture law has expanded by leaps and bounds. Unfortunately, the impulse to expand the type and amount of property subject to forfeiture has not been matched by legislative
concern for the rights of innocent property owners who are
the collateral casualties of the forfeiture campaign.

Reaching Beyond the "Profits of Crime"

The political drive to apply forfeiture laws to an ever
expanding array of criminal conduct is often accompanied by
jingoistic appeals to "take the profit out of crime." If
the forfeiture laws reached only the profits of crime, they
would cause a fraction of the mischief they now cause, as
the only significant issue would be one of defining "profits
of crime." Today, however, forfeiture laws reach far beyond
such profits. Those who defend them on the ground that
their purpose is to "take the profit out of crime" simply
ignore their true breadth.

On the civil side, for example, property subject to
forfeiture includes that which "facilitates" unlawful conduct.(36) The use of even a small part of a piece of realty
can render an entire tract forfeitable.(37) Under such a "facilitation" forfeiture claim, the government was recently
able to seize all of the assets in a bank account on the
theory that the legitimate funds in the account provided a
"cover" for the deposit of forfeitable funds and thus rendered all of the money in the account subject to forfeiture.(38)

Similarly, the scope of criminal forfeiture is substantially broader than the "profits of crime." Under federal
criminal statutes such as RICO, a convicted defendant must
forfeit any property interest, however legitimately acquired
or used, if that interest affords the defendant a source of
influence over an alleged RICO "enterprise"--a broad term
that can encompass any legitimate business entity. Originally meant to enable law enforcement officials to purge the
financial influence of organized crime in legitimate businesses, such "enterprise" forfeitures have since been used
to impose drastic forfeitures upon any defendant convicted
of a RICO violation having a connection to a legitimate
business. In United States v. Porcelli, for example, a RICO
defendant convicted of failing to pay New York sales taxes
due from his gas station franchise was ordered to forfeit
not only an amount equal to the delinquent tax obligation
but also his 29 separate corporations through which he owned
and operated the chain of gas stations.(39)

Broad Criminal Pretrial Freeze Orders

Congress augmented the broad scope of criminal forfeitures under RICO and the Drug Kingpin Statute(40) with authorization to seek pretrial restraining orders--sometimes
known as asset freeze orders--to prevent a defendant from
using, transferring, or dissipating his assets prior to
trial. The apparent need for pretrial seizure orders stems
from the different procedures in civil and criminal forfeiture cases. A civil forfeiture case begins with the seizure
(arrest) of the offending piece of property; the "punishment" of criminal forfeiture, on the other hand, cannot be
imposed until after a defendant is convicted. In criminal
forfeiture cases, therefore, the government cannot seize
property prior to conviction as it has no title or punitive
interest in a defendant's assets prior to conviction. The
occasional need for freeze orders during the period prior to
verdict in order to preserve the status quo is apparent,
especially with perishable assets. Although the use of
pretrial restraining orders may be reasonable in certain
circumstances, their impact can be devastating, especially
when coupled with the relation-back doctrine.

Pretrial freeze orders in criminal cases can deny a
presumptively innocent defendant the use of his assets to
pay necessary living expenses or even the costs of defending
against the government's prosecution. The relation-back
doctrine compounds the defendant's problems by sending a
warning signal to all who have previously dealt with him and
to those who must deal with him in the future, that they
deal at their peril. When a forfeiture claim is included in
an indictment, the defendant may become a commercial leper:
those who have previously dealt with the defendant cannot be
sure that the defendant can perform existing contractual
obligations or honor future commitments, and the cloud of a
government title-claim will hover over past and future
transactions.

Oddly enough, even the severe English common law would
not have tolerated this harsh result. Under that law, the
relation-back doctrine was limited to land; it did not affect a criminal defendant's chattels. As Blackstone observed:

Therefore, a traitor or felon may bona fide sale
any of his chattels, real or personal, for the
sustenance of himself and his family between the
fact and conviction; for personal property is of
so fluctuating a nature, that it passes through
many hands in a short time; and no buyer could be
safe, if he were liable to return the goods which
he had fairly bought, provided any of the prior
vendors had committed a treason or felony.(41)

Thus, the English common law's refusal to apply the
relation-back doctrine to personal property was a practical,
if humanitarian, concession to the interim needs of the
accused to support his dependents while awaiting trial, as
well as a tacit recognition of the obvious unfairness of
applying the relation-back doctrine to third parties who
deal with an accused during this time frame. In the
stampede to expand the reach of forfeiture law, however,
Congress in 1984 extended the relation-back doctrine to
criminal forfeitures.

The mere return of a forfeiture claim in a criminal
indictment, therefore, can disable a defendant. For business associates or partners of the defendant, the consequences can be equally disastrous. Even though not accused,
their assets can be restrained,(42) and their prior transactions invalidated as a result of the relation-back doctrine.
Moreover, typical criminal forfeiture statutes bar affected
third-party property owners from intervening in the criminal
case or filing suit to resolve their situation prior to the
completion of the criminal prosecution.(43)

Fee Forfeiture

In 1989, in an opinion that dismayed much of the legal
community, the Supreme Court sustained the pretrial use of
criminal forfeiture laws to prevent a presumptively innocent
defendant from paying for his defense counsel.(44) The
Supreme Court's fee forfeiture opinions are remarkable not
only for their result but for the reasoning employed by the
majority to reach that result.

As noted earlier, criminal forfeiture was introduced
into federal law in 1970 as a RICO sanction.(45) By 1989 Congress had enacted criminal forfeiture as a sanction for a
number of other criminal offenses,(46) including all drug
offenses.(47) But despite this expansion in its application,
the purpose of criminal forfeiture remained constant--to
punish criminals for their conduct.(48) In 1989, however, the
Supreme Court's fee forfeiture opinions supplemented the
penal purposes that had led to the introduction of criminal
forfeiture in 1970 by adding as objectives revenue raising
for the Department of Justice and restitution for crime victims.(49)

This remarkable expansion in the objectives of criminal
forfeiture cannot be traced to any congressional act or to
any practice of the department. The new "restitutionary"
objective, for example, was never authorized under RICO's
forfeiture provisions; nor has it ever been implemented in
practice by the department. Simply stated, the Department
of Justice does not use the forfeiture laws to provide restitution to victims of criminal conduct,(50) however worthy
that objective might be. As a statutory matter, the U.S.
Court of Appeals for the Second Circuit had previously stated it plainly: "Forfeiture under RICO is a punitive, not a
restitutive, measure."(51) Moreover, in its original statute,
Congress had expressly provided a civil restitutive remedy
for RICO victims in the form of a claim for treble damages
against defendants.(52) That arrangement contained no provision for government financial involvement in meeting the
legitimate restitution needs of victims.(53) Although Congress in 1984 authorized the Department of Justice to amend
its regulations to enable victims to seek restitution from
forfeited assets through the administrative petition-for-remission process, the department has never promulgated any
such regulatory changes. In fact, the department has stead
fastly, and successfully, fought against claims by crime
victims to participate in forfeitures awarded in criminal
forfeiture cases. Thus, this newly discovered
"restitutionary" purpose for criminal forfeiture was merely
a deus ex machina that the Supreme Court created to bolster
its conclusion regarding attorney fee forfeiture in cases
that were, after all, drug cases in the first place, and
hence problematic as victim restitution cases.

Similarly, the Supreme Court's recognition of a government "pecuniary interest" in maximizing criminal forfeiture
to use forfeiture proceeds for law enforcement purposes has
no basis in the legislative history of criminal forfeiture.
The creation of an Asset Forfeiture Fund in 1984 was a congressional reaction to the chronic mismanagement of seized
assets by government agencies, which had led to a situation
in which "the sale of forfeited property realizes less than
the expenses incurred by the government in storing, maintaining, and selling the property, [and] the net loss must
be carried by the agency's budget."(54)

The Asset Forfeiture Fund was created to ensure better
management of seized assets and to reduce the financial
burden of this management on the seizing agency. Thus, the
fund was intended as a means toward efficiently facilitating
the ends of forfeiture, not as an end in itself. According
to the majority opinion in Caplin & Drysdale, however, the
government appears to have a legitimate financial interest
in maximizing forfeiture solely for revenue raising
purposes--a goal not traditionally associated with our criminal justice system, and one that raises serious questions
about whether perverse law enforcement incentives are being
created.

Abandoning the Taint Limitation on Civil Forfeitures

If civil forfeiture is at all justified, its proper
scope, one imagines, is a matter for legislative bodies to
determine as they enact laws that describe the specie of
property subject to civil forfeiture by reason of its relationship to specified unlawful activity--sometimes described
as the property's "nexus" to unlawful activity.(55) Common
nexus provisions use limiting language such as property that
"facilitates"(56) certain offenses or property that is used
"in furtherance of" unlawful activity.(57) Hence, determining
whether certain assets are subject to civil forfeiture will
often involve a factual inquiry into whether or not the
asset's alleged use falls within the nexus language chosen
by the legislature.

At some point, however, the nexus between property and
criminal activity is so attenuated that it simply strains
credulity to say that the property is "tainted" by that
activity. Yet, some states are today authorizing just such
a result--civil forfeiture of property untainted by any
direct connection to unlawful conduct. The real purpose of
such forfeitures is apparent: they attempt to impose a nominally civil sanction not on tainted property but rather
directly on a property owner for his criminal conduct.

And in doing so, of course, they avoid the strict constitutional protections that are applicable to criminal
forfeitures. It is here, at the edges of civil forfeiture
law, that current jurisprudence offers little guidance.
However uncompelling in their own right, old and time-honored civil forfeiture rationales--such as a property's
"guilt in the wrong"(58)--offer no support whatever for extending the scope of civil forfeiture beyond tainted property directly used in criminal conduct.

In the words of Justice Stephen J. Field, in his dissent to an 1870 Supreme Court opinion upholding the confiscation of property owned by former Confederate soldiers
after the Civil War, such a forfeiture seeks confiscation of
property "without any reference to the uses to which the
property is applied, or the condition in which it is found,
but whilst so to speak it is innocent and passive, and removed at a distance from the owner and the sphere of his
action, on the ground of the personal guilt of the owner."(59)
With the forfeiture of untainted property, the oft-invoked
nostrum that civil forfeiture is merely remedial is no longer persuasive, while the punitive aim is as transparent
today as it was to Justice Field in 1870.

Many states continue to track federal law by recognizing a distinction between criminal forfeiture actions, with
their potentially broader scope, and civil forfeitures.(60)
However, other states, such as Arizona,(61) have abandoned the
traditional distinction between criminal and civil forfeitures and allow the imposition of civil forfeitures, with
their reduced procedural protections, on wholly untainted
property. The failure of these states to adopt the traditional distinction can be explained, perhaps, by the fact
that states have never exercised customs responsibilities
and therefore have had no need to develop civil forfeiture
as an unusual customs enforcement tool. Instead, these
states have typically used civil forfeitures in accordance
with their modern rationale--as an adjunct to criminal law
enforcement.

The Arizona forfeiture statute purports to be a logical
extension of this trend. Its advocates have described it as
"a stride in the evolution of a 'civil justice system' to
complement the 'criminal justice system' through judicial
intervention in anti-social behavior."(62) They add that it
represents "the leading edge of civil remedies for economic
injustices."(63) The attractiveness to state law enforcement
of following Arizona's lead is obvious: broadening the scope
of forfeiture, while narrowing available procedural protections, will undoubtedly strengthen law enforcement and
also will enrich the coffers of state law enforcement for
which forfeited property is earmarked. Absent some constitutional barrier to this practice, its future seems bright.

Righting the Wrongs of Forfeiture

As the preceding discussion indicates, forfeiture laws
today are broad and getting broader, causing unfair and
needless injury to property owners. Indeed, this trend is
all but admitted by law enforcement officials, whose principal argument against forfeiture reform is that law enforcement does not or will not enforce forfeiture laws to
their literal extremes.(64) Needless to say, this "trust us"
argument is incompatible with the central tenet of our legal
system--that ours is a government of law, not of men. If
the law does not protect property owners from unjust confiscation of their property, it is but a short step to unjust
acts against their persons. At the least, the trust us
argument rings especially hollow when offered by government
officials whose agencies are the direct financial beneficiaries of expanding forfeiture efforts.

If we are to right the wrongs of forfeiture, however,
we have to return to first principles, not to the stable of
legal fictions that have led to the system we have today.
That means taking a candid look at many of those fictions.
Those who hold, for example, to the canard that civil forfeitures are "civil" because they are remedial, not punitive, are simply deluding themselves. The property owner
who loses his property because of his own or another's criminal conduct knows full well that civil forfeiture is punitive, not remedial. No wrong is being remedied--in particular, no victim of crime is being compensated by the criminal. Instead, the criminal's--or innocent owner's--property
is being taken by the government, plain and simple. Similarly, the fiction through which this is done--personification--must itself be jettisoned as it only distracts us from
the real issues.

At the same time, forfeiture can play an important role
in taking the financial incentive out of crime, especially
so-called financial crime. Forfeitures directed at the true
"profits of crime," for example, can reduce the lure of
criminal opportunities. If forfeiture laws are narrowly
targeted toward that end, with a commensurate effort to
eliminate adverse collateral damages to innocent property
owners, they can play a constructive role in criminal law
enforcement.

Plainly, the simplest and most intellectually honest
way to accommodate both the interest of law enforcement and
the constitutional restraints that surround that enforcement
is to use forfeiture only in criminal cases. Because forfeiture would follow only upon conviction of a crime, that
would eliminate forfeiture by innocent third parties or by
those found to be not guilty. Moreover, shifting the burden
of proof to the government in a criminal prosecution would
ensure the use of only competent evidence. Thus, property
owners would not be burdened with the task of proving their
"superinnocence"--that is, their lack of knowledge of the
acts of others.

Yet, even if this fundamental change were made, existing criminal forfeiture laws would need to be revised to
ensure that they comport with procedural due process--especially in affording individuals the means to defend themselves--and avoid financial injury to nonaccused third-party
owners. Nonetheless, if federal and state forfeiture authority were limited to criminal forfeitures, many of the
legitimate grievances of property owners would be eliminated. Finally, the eradication of civil forfeitures would
relieve the legal system of the unattractive task of maintaining the legal fictions that only undermine respect for
law generally.

So far reaching and principled a reform of forfeiture
law would be resisted, of course, not only by law enforcement officials but by many legislators as well, notwithstanding the draconian sanctions that are visited daily upon
property owners by that law. Accordingly, it is worth considering a few second-best reforms. In doing so, however,
at least three principles should guide us.

First, and foremost, innocent owners should not be
harmed by forfeiture laws. The laws should be modified
where necessary to ensure both that innocent property owners
are not injured by their application and that the burden of
justifying forfeiture rests squarely on the government.

Second, as a corollary of the first, forfeiture laws
should not rely primarily upon the unreviewable discretion
of law enforcement officials to protect the legitimate interests of property owners. Many existing forfeiture laws
leave the task of discriminating between property owners
deserving of forfeiture to the largely unguided discretion
of law enforcement officials. Property owners must be able
to rely upon their existing legal rights, not on the mercy
of law enforcement agents, to protect against unwarranted
property loss through forfeiture.

Third, forfeiture should be a law enforcement weapon,
not a revenue raising device for law enforcement. To that
end, the fruits of successful forfeiture prosecutions should
be subject to the legislative appropriations process, not
left as booty with the seizing agency. This last principle
will perhaps encourage greater public accountability. More
importantly, however, it will remove the actual or potential
financial incentives that forfeiture offers law enforcement
agencies to distort the exercise of enforcement discretion.
As a federal judge recently noted, the vast quantities of
assets seized under the forfeiture laws "leads some observers to question whether we are seeing fair and effective law
enforcement or an insatiable appetite for a source of increased agency revenue."(65) In addition, subjecting the
fruits of forfeiture to legislative control, as opposed to
the exclusive use of law enforcement agencies, will eliminate the irrationalities that can easily occur when the
funds generated have no necessary economic relationship to
legitimate enforcement needs.

Although forfeiture reform might be guided by additional principles, these three should be common ground for all
sides. Moreover, translating them into specific legislative
proposals is not terribly difficult. In fact, the National
Conference of Commissioners on Uniform State Law has already
identified specific proposals that are consistent with such
principles. Following is a list and brief discussion of
those proposals.

Eliminate the Relation-Back Doctrine

The sole purpose of the relation-back doctrine is to
give the government priority in a title fight with property
owners who acquire property after it has been "tainted" by
unlawful conduct. Assuming the irrational taint doctrine
remains, the principal, if not exclusive, object of the
relation-back doctrine is to prevent fraudulent or collusive
transfers aimed at frustrating the government's interest in
the tainted property.

With the advent of the innocent-owner defense, however,
the justification for the relation-back doctrine disappears.
Currently, to obtain an exemption from forfeiture, property
owners who acquire tainted property must prove their "innocence," or lack of knowledge of or consent to the unlawful
conduct. If owners can prove their innocence, forfeiture
policy should dictate that their property interests will not
be forfeited, regardless of when the government fictively
obtained title pursuant to the relation-back doctrine. In
short, if innocence--defined broadly as total ignorance of
the criminal conduct--justifies exemption from forfeiture,
then the relation-back doctrine is unnecessary because those
who would knowingly participate in a collusive transfer of
tainted property are not eligible for the innocent-owner
defense; their property remains tainted.

If the relation-back doctrine were only superfluous,
its elimination might not warrant tinkering with the forfeiture laws. Unfortunately, the mischief caused by the doctrine justifies its prompt elimination for three independent
reasons: it is unnecessary, it can harm innocent owners, and
it causes needless uncertainty in commercial transactions.
As indicated above, the Department of Justice has taken the
position before the Supreme Court that the relation-back
doctrine trumps innocent owners, meaning that those who
innocently acquire tainted property, by purchase, inheritance, honest labor, or gift, have acquired nothing because
title vested earlier with the government. This position
violates what should be the first principle of forfeiture--
innocent property owners should not be harmed.

Moreover, the relation-back doctrine is anathema to
commerce in property. Commerce in real and personal property is governed by a series of laws aimed at ensuring predictability and reliability in commercial transactions,
especially in a commercial world driven by extensions of
credit. A linchpin of commercial practices is the public
filing or recording of ownership interests in property or
credit, thus placing all who deal with property on notice of
property interests.

The relation-back doctrine, with its secret attachment
of a hidden government lien on property, upsets the carefully designed public legal systems by which all participants
in commerce guide their affairs and protect their interests
in property. Needless to say, criminals don't file timely
descriptions of their criminal conduct in a house with the
recorder of deeds office; the purchaser of the house, however, is left to guess as to whether somewhere in the chain of
title, the government obtained title without giving notice
to anyone.

Make Civil Forfeitures Proportional

Under current law, conduct that leads to civil forfeiture ranges in culpability from negligence to mere knowledge
of criminal conduct by others, to actual criminal conduct on
the part of the property owner. Criminal forfeiture, requires proof, of course, of greater culpability--that an
owner knowingly used his property in a criminal offense.
But, at least in criminal prosecutions, the Eighth Amendment
prohibits the imposition of disproportionate forfeitures on
the convicted felon. Unfortunately, because of the
judiciary's steadfast refusal to acknowledge that civil
forfeitures have a penal purpose, courts have held that the
Eighth Amendment protection against disproportionate punishment is unavailable to property owners in civil forfeiture
proceedings. Apart from that myth, this discrepancy cannot
be justified.

If the worst offenders--criminals--are entitled to have
forfeitures leavened by a proportionality limitation,
commonsense suggests that less culpable owners--including
those with no criminal culpability whatsoever--should receive similar protection against suffering disproportionate
punishment under the guise of civil forfeiture. Indeed,
after noting that it could not hold that a proportionality
limitation was constitutionally compelled for civil forfeitures, the U.S. Court of Appeals for the Eighth Circuit
recently urged Congress to enact a statutory proportionality
limitation on civil forfeitures.(66) As Congress has previously provided express proportionality limits on criminal
forfeitures in obscenity prosecutions,(67) extension of such
protection to all civil forfeitures could serve the same
end--to mitigate harsh forfeitures. Law enforcement officials simply have no legitimate purpose in imposing disproportionate forfeitures, whether characterized as "civil" or
"criminal." Certainly, their need for revenue cannot justify such disproportionate forfeiture. Imposing statutory
proportionality limits, therefore, would hinder no legitimate law enforcement needs.

Shift the Burden of Proof, by a Preponderance of Competent
Evidence, to the Government

Under federal forfeiture law, and that of several
states, to obtain forfeiture the government need only prove
that it has "probable cause" to believe that property was
used unlawfully. Probable cause is a fairly accommodating
standard of proof, lying slightly above a hunch but far
below the standard necessary to prove any fact in a court of
law. In civil judicial proceedings, the least stringent
standard of proof is "by a preponderance of the evidence"--
meaning that the evidence indicates that an assertion is
more likely to be true than not. Probable cause of criminal
conduct, on the other hand, is the minimum showing necessary
to justify searches under the Fourth Amendment or allegations (as distinct from proof) in a criminal case.

Because federal courts over the past decade have shown
increasing willingness to authorize police searches, the
probable cause standard has gradually been eroded as a substantial barrier to obtaining court approval for searches
and seizures. A showing of probable cause can be made, for
example, through the use of hearsay or other "evidence" of
insufficient reliability to be admissible in a court proceeding. Hence, by linking the government's ability to
obtain forfeiture solely to its ability to establish probable cause that property was used unlawfully, the forfeiture
laws permit the forfeiture of property upon a de minimus
evidentiary showing, one far below that imposed upon any
plaintiff in a civil proceeding.

Simply put, there is no justification for relieving the
government of the burden of proof that any other civil
plaintiff must shoulder--that of proving its case by a preponderance of competent admissible evidence. Indeed, when
property owners come forward to prove their innocence in a
forfeiture exemption plea, they must do so by a preponderance of the evidence, including proof solely by admissible
evidence. Doubtlessly, the government enjoys the probable
cause standard because it lightens its burden. But such a
de minimis standard increases the risk that property owners
will wrongly lose their property to forfeiture.

Federal courts have largely accepted, without scrutiny,
the probable cause standard for civil forfeitures. Recently, however, a federal judge, writing in dissent, carefully
examined whether a probable cause standard for civil forfeiture violated due process by not providing sufficient protection for property owners. In United States v.
$12,390.00, the U.S. Court of Appeals for the Eighth Circuit
affirmed what has become commonplace--the seizure and forfeiture of money based solely on the inadmissible hearsay of
informants that the money was related to drugs after a
search that netted neither drugs nor arrests.(68) In his
well-reasoned dissent, Judge Arlen Beam wrote:

[T]he current allocation of burdens and standards of proof requires that the claimant [owner]
prove a negative, that the property was not used
in or to facilitate illegal activity, while the
government must prove almost nothing. This cre
ates a great risk of an erroneous, irreversible
deprivation [of property]. . . . The allocation of
burdens and standards of proof . . . is of greater
importance since it decides who must go forward
with evidence and who bears the risk of loss
should proof not rise to the standard set. In
civil forfeiture cases, where claimants are required to go forward with evidence and exculpate
their property by a preponderance of the evidence,
all risks are squarely on the claimant. The government, under the current approach, need not
produce any admissible evidence and may deprive
citizens of property based on the rankest of hearsay and the flimsiest evidence. This result
clearly does not reflect the value of private
property in our society, and makes the risk of an
erroneous deprivation intolerable.(69)

Judge Beam is clearly right. Although a probable cause
standard may be adequate to justify making allegations, it
is hardly adequate to justify seizing and forfeiting property to the government.

Law Enforcement's Opposition to Reform

Again, the foregoing proposed reforms are second-best,
being aimed at mitigating an otherwise intolerable body of
law. Nevertheless, they have been vigorously opposed by the
Department of Justice, the National Association of Attorneys
General, and the National District Attorneys Association.

Each of the proposals was contained in the recent draft
uniform statute that received the preliminary support of the
Uniform Law Commission.(70) In 1991, however, the three
aforementioned law enforcement groups summarily withdrew
from the deliberations of the commission because they considered these reforms totally unacceptable. Indeed, to
fight against the reforms, they have drafted their own alternative model forfeiture bill, based essentially on the
Arizona statute, which they have labeled the "Model Asset
Forfeiture Act." That act, of course, does not contain any
of the offending reform measures; and it proposes to expand
forfeiture laws to further the "social engineering" goals
that have been espoused by the Arizona attorney general's
office.

As forfeiture becomes an ever larger part of law
enforcement, it is important to remember that there are
institutional forces at work that are every bit as strong
today as they were in colonial America, when forfeiture was
not only an enforcement weapon for British taxes but a means
for financing British administration of the colonies.
Today, the addition of $643 million from forfeitures to the
Department of Justice's 1991 budget alone should convey the
importance of forfeiture to the department--and should make
understandable its desire to maintain the status quo. That
desire is no less intense at the state level across the
country.

Conclusion

As the injustice of modern forfeiture law becomes ever
more clear and widespread, it is time to reexamine its roots
and its rationale. With judicial approval, forfeiture laws
have been applied in ways that strain, if not violate, our
fundamental constitutional guarantees. Meanwhile, law
enforcement officials, smitten with the tactical advantages
and financial attractions of forfeiture, are trying to
expand its reach, making of it a generalized tool for social
engineering. Such efforts should be vigorously resisted.
If private property is the foundation of a free society, as
the republic's Founders repeatedly wrote, then modern
forfeiture law is an affront, and a threat, to that very
foundation.

Notes

(1) See United States v. $12,390.00, 956 F.2d 801, 807 (8th
Cir. 1992) (Beam, J., dissenting); Department of Justice,
Annual Report of the Department of Justice Asset Forfeiture
Program 1991 (foreword of Attorney General William Barr).

(2) Ibid., p. 15.

(3) State v. Real Property known as 451 Rutherford Avenue,
Superior Court of Sussex County, New Jersey, docket no.
S.S.X-L-120-91.

(7) Cameron Holmes, "History and Purpose of Arizona Forfei
ture under A.R.S. sections 13-4301," at 1 (1990), reprinted
in ABA National Institute on Forfeitures and Asset Freezes
(1990) (Mr. Holmes is an Assistant Attorney General for
Arizona).

(9) In the early days of the republic, customs duties ac
counted for approximately 70 to 80 percent of federal reve
nue. Bureau of the Census, Historical Statistics of the
United States, Doc. 33, 86th Cong., 1st sess. 712 (1960).

(16) As described by Justice Story, one of the Supreme
Court's most prolific early expositors of civil forfeiture
law, when property, in a forfeiture proceeding, is held not
to have been used in violation of the law, "the taint of
forfeiture is completely removed, and cannot be reannexed to
it. Gelston v. Hoyt, 16 U.S. 246, 318 (1818) (emphasis
added). See also United States v. 1960 Bags of Coffee, 12
U.S. 398, 406 (1814) (Story, J., dissenting) (describing
"the secret taint of forfeiture" attaching to goods used in
violation of customs laws).

(45) See Measures Relating to Organized Crime, p. 407 (pro
viding Department of Justice support for "revival of the
concept of forfeiture as a criminal penalty" in proposed
RICO bill); see also S. Rep. 225, 98th Cong., 1st Sess. 82
(1983) (stating that "[f]rom that time [1790] until 1970
there was no criminal forfeiture provision in the United
States Code"). See, generally, Reed and Gill.

(50) See 28 C.F.R. section 9 (1989) (regulations governing
remission or mitigation of criminal forfeitures; no refer
ence to restitution as a purpose of civil or criminal for
feiture mitigation or remission decisions).

(64) See, for example, United States Attorneys Manual sec
tions 9-110.414 (Federal government's "policy is not to seek
the fullest forfeiture permissible under the law where that
forfeiture would be disproportionate to the defendant's
crime;" government "will not seek through use of the rela
tion-back doctrine to take from third parties assets legiti
mately transferred to them").

(66) See United States v. One Parcel of Property Located at
508 Depot Street, 964 F.2d 814, 818 (8th Cir. 1992).

(67) See 18 U.S.C. section 1467(a)(3).

(68) 956 F.2d 801 (8th Cir. 1992).

(69) Ibid., at 811 (Beam, J., dissenting).

(70) Under the rules of the Conference, a bill must be read
and approved twice before it becomes an approved uniform act
for distribution to the state legislatures for their consid
eration. The draft forfeiture bill that was submitted to
the full conference in 1991 was approved upon its first
reading but it must still be given a second reading before
formally becoming a uniform act of the Conference.